Regulatory: Plan B - Obama Exercises Unilateral Executive Authority

With the loss of the House, the Obama Administration is shifting from a strategy based on obtaining new legislation to implement its policy priorities to an approach that relies upon the president's inherent authority to manage the executive agencies. The president has moved aggressively to implement new programs designed to appeal to his political base and whose effects are concentrated in states he has little chance of carrying in 2012.

In the week before Christmas, the Administration rejected the cautious political strategy of "triangulation" and unveiled three major policy initiatives despite strong Republican opposition. The only manner in which these initiatives can be blocked is through legislation denying funding to the implementing agencies.

Health care. On Christmas Day, the New York Times reported that the Medicare program has adopted a rule that will pay doctors, as part of their yearly "wellness visits" with patients, who discuss options for end-of-life treatment, such as advance medical directives that would forgo heroic measures to sustain life when death is near. When proposed as part of the health care reform legislation, this policy was attacked as creating "death panels" and was stripped from the bill to facilitate passage. Medicare has now adopted this policy by exercising its delegated authority to fill ambiguities and gaps in statutes.

Land management. On Dec. 23, the Secretary of the Interior directed the Bureau of Land Management, the country's largest land manager, to create a new system to designate areas under its jurisdiction as "Wild Lands" and to manage them to protect their wilderness values. This order will preclude many forms of human activity, such as mining, in the protected lands. The decision reversed a Bush Administration policy and invoked the secretary's discretion to create a parallel program that bypasses the limits on executive authority to create wilderness areas that Congress previously had enacted. The effects of the "Wild Lands" policy will be centered in 11 Western states and Alaska, where for the most part the president will not be competitive in 2012.

Greenhouse gases. On December 23, the Environmental Protection Agency announced that it had entered into a consent decree requiring it to issue regulations ("New Source Performance Standards") to establish quantitative limits on GHG emissions from individual fossil fuel power plants and petroleum refineries. This step will lead to direct federal regulation over industrial sectors that account for 40 percent of domestic GHG pollution and whose regulation was the centerpiece of the Administration's failed effort to obtain cap-and-trade legislation. Under this timetable, the rules must be issued in the latter part of 2012, which will give the Administration time and leverage to seek to persuade Congress to adopt legislation that would forestall aggressive EPA rules.

The EPA also revoked Texas' authorization to issue air emission permits, in response to its refusal to limit GHGs as required by federal law, and will issue these orders directly. This initiative will be unpopular in Republican Texas, which is heavily dependent on coal-fired power plants and contains 27 percent of the national refining capacity.

By presenting these challenges to the new Congress, the president has shown that he is not interested in playing "small ball" but intends to use his inherent authority to manage the executive branch to pursue major regulatory initiatives. To block these actions, Congress will have to overcome its internal divisions and the threat of presidential vetoes.

John F. Cooney is a partner in the Washington, D.C., office of Venable.